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FATCA compliance could be costly — Premier

Complying with US demands that Bermuda automatically transfer financial information on its citizens to US authorities could come at a huge cost, Premier Craig Cannonier acknowledged yesterday. The US is requiring automatic transfer of financial information of its citizens in other jurisdictions in a bid to fight tax avoidance and fraud, under its Foreign Account Tax Compliance Act . UK authorities are demanding a similar arrangement. “Obviously it would be a cost involved and that has been our concern — what is something like this going to cost?” Premier Cannonier said. “If it is going to cost us, the jurisdictions who are requiring this, are they going to be putting up money to help support it? We still haven’t ironed that out and gotten any full disclosure as to how that would work. But there’s a major concern that this could be extremely expensive in setting up.” The Premier made his remarks after giving a positive report of his attendance at last week’s RIMS conference in Los Angeles. Last night Finance Minister Bob Richards confirmed that Bermuda had opted to sign an Intergovernmental Agreement with the US which will put the onus on financial institutions to supply information required by FATCA directly to US and UK authorities. The ‘IGA2’ agreement also gives an assurance that Bermuda’s tax information exchange agreements (TIEAs) with those countries will be used to force compliance, if necessary. The Premier also revealed that Government had given all the necessary approvals for the City of Hamilton hotel project but that Government and City Hall remain at loggerheads over the waterfront redevelopment project. “That is an ongoing relationship that we continue to seek out to find out where we stand as far as what’s going to happen with the waterfront and the contract that may have been signed. That still has not been resolved. And I spoke with the Mayor just a few days ago about meeting again to see how we can get this thing going,” he said. “That’s a major product and we want to make sure we get it right. So we will continue to work with Corporation to see how we can resolve this.” Government has been unable to do its due diligence on the waterfront project because City Hall has not provided crucial documents, including the lease it signed with its selected developers Allied Development Partners. Mr Cannonier said that he had been impressed by the level of interest in Bermuda from international businesses at the RIMS conference, and by the 100 or so volunteers from Bermuda who attended the conference. “I must commend the Bermuda team who represented our country with an outstanding degree of professionalism. The Bermuda booth was by far the most visited of the entire conference, with an unprecedented 2,500 people visiting the booth,” he said. Mr Cannonier also announced that 13 new insurance companies had been registered in the first quarter of this year — up by seven over the same period last year. That, he said, was a sign that the country is heading in the right direction. And he reported that media at the conference were particularly interested in Government policies such as that relating to term limits. “We are now more confident than ever that the decisions we have made as a Government to ignite interest in Bermuda, and in turn to stimulate the economy are the right decisions. “We were able to let the world know that we are making it easier for them to conduct business with us and will continue to set the stage for inward investment.” Government controversially abolished term limits upon taking office.

Premier Craig Cannonier, who has recently returned from the RIMS conference in Los Angeles.